Moody's chief economist Mark Zandi said he had not seen much of People are convinced that a recession is imminent, as is the case now despite his long history as an economist in the markets for more than 3 decades.
According to Arab Net, Zandi believes that while the US economy can still avoid such an economic downturn, sentiment is so weak that it poses its own risks - a kind of recession prophecy that will come true.
Zandi cut his forecast for US GDP for this year and next to 1% and 2%, respectively, from previous forecasts of 2% and 2.5%, respectively.
Despite his optimism that the economy is still far from the danger of a recession, the pessimism is at an all-time high, according to Zandi, who said in the What's Goes up? podcast: I'm talking to CEOs, CFOs, investors, friends and family — everyone thinks we're in a recession. . I've never seen anything like this before. I've seen a lot of business cycles, and I've never seen so much recession consensus in my life. So when emotions are so fragile, it won't take much to push us into danger. I think that with a little luck, and some reasonably good policymaking by the Federal Reserve, we'll be able to avoid a recession, according to Al Arabiya.net.
Zand gave a set of reasons for his optimism, which is that inflation rates will automatically decline, especially since oil prices actually fluctuate, while natural gas prices are witnessing a decline. He believes that car prices will also decline, as supply chain problems are resolved and more cars are produced. On the other hand, commodity prices fell on a larger scale.
He reinforced his view that for the typical American family, according to his calculations, as of June they had excess savings of between $7,000 and $8,000 per family. So if the current price hike means paying an extra $500 a month for higher inflation and I have these savings I have very little time, and I can use that extra savings to supplement my income, to offset the ill effects of higher inflation.
